Iran Press/Middle East: Saudi Arabia has asked Iraq’s national oil company, the State Organization for Marketing of Oil, or SOMO, for as much as 20 million barrels of crude to supply Saudi’s domestic refineries and keep exports flowing, two people familiar with the matter told The Wall Street Journal.
Aramco declined to comment, and SOMO’s deputy head of crude sales, Ali Nazar Shatar, said there is no contract between SOMO and Aramco.
After attacks on the country’s largest oil facilities, which has been changing global trade flows in unusual ways, the Saudi regime is reaching out to foreign producers for crude and other petroleum products, upending its usual trade flows to plug gaps in its own supply.
The attack on several Saudi energy facilities on Saturday knocked out more than half of crude output from the world's top exporter and cut output by 5.7 million barrels per day.
Yemen's Houthis, who have been locked in a war with a Saudi-UAE-led coalition since 2015, claimed responsibility for the attacks, warning Saudi Arabia that their target list "will keep on expanding".
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The disruption to Saudi supplies is having knock-on effects all along the global oil-supply chain. To maintain its reputation as a reliable supplier, the world’s largest oil exporter is looking to buy crude oil from at least one of its neighbors and additional oil products from the global market, oil traders said.
Much of what Saudi Arabia exports is unrefined crude oil. The Kingdom isn’t normally an importer of crude and is ordinarily a net exporter of refined oil products.
State-owned Saudi Arabian Oil Co., or Aramco, said Tuesday that it would meet its obligations to supply customers while it repairs damage from the attacks. Saudi officials earlier this week said they would use reserves to return production to normal levels within weeks, claiming that they had restored 50% of lost output.
Shortly after Saturday’s attacks, Aramco was in the market seeking products including diesel, gasoline and fuel oil for domestic use, according to traders. To preserve its own crude for exports, Saudi Arabia needs to reduce the amount of domestic crude it refines to make those products.
Last year on average Saudi Arabia produced 10.3 million barrels of crude oil a day and exported 7.4 million barrels a day, along with an additional 2 million barrels a day of refined products, according to the Organization of the Petroleum Exporting Countries.
The attack on the Abqaiq oil processing plant is expected to cut activity at domestic refineries by up to 1.4 million barrels of crude a day, reducing the supply of products for domestic consumption and exports, said Iman Nasseri, managing director the Middle East at consulting firm Facts Global Energy.
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